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Retirement tax questions
Withdrawals from a pre-tax 401k are always taxable. In most cases, you also pay a 10% penalty if you are under age 59-1/2. There are a few exceptions to the penalty, but the only one that might apply to you is you can exclude $1000 from the penalty for a personal emergency. But if you withdrew more than $1000, you pay the penalty on the rest and tax on all of it.
Even though your plan may allow a hardship withdrawal, it is still taxable.
If you have left the company, you can withdraw for any reason (you do not have to prove a hardship) but you still pay income tax and penalties.
‎January 27, 2025
7:25 PM